CFT: St. Maarten needs to increase tax incomesPOSTED: 03/18/15 7:07 PM
GREATBAY/WILLEMSTAD –“Sint Maarten still has the challenge to increase tax incomes, whereby a reinforcement of the tax office and also an improvement of the compliance should have the highest priority. The Cft requested a more detailed explanation from the government for the estimated revenue in the budget of 2015. Besides Sint Maarten still deals with substantial payment arrears at amongst others the APS and SZV, for which a solution should be found on a very short term. Finally the Cft also has expressed its thoughts about the compensation of the realized deficits, and the level of the proposed investments of Sint Maarten,” the CFT writes in a media release issued yesterday regarding its second semiannual report for 2014.
During the second half of 2014 Cft gave its advice on the draft budget for 2015 of Curaçao as well as for Sint Maarten. “In the adopted budgets this advice was not processed sufficiently; for that reason after the adoption of the budgets the Cft again submitted an advice. For Curaçao it mainly concerns the necessary measures to decrease the deficits in the AOV fund and the elaboration and execution of action plans to make the four ailing government companies (CDM, ADC, Aqualectra, Cpost) become solid again. In the meanwhile the necessary agreements have been made with Curaçao so Cft may give the budget 2015 a definite positive advice.”
The Board of financial supervision Curaçao and Sint Maarten observes in its second semiannual report for 2014 that the budgetary discipline has increased in both countries. For Curaçao this translates itself into a surplus on the normal service and for Sint Maarten into a slight deficit of almost ANG 8 million. At the same time the risks outside the direct influence environment of the government increase. Chairman Age Bakker said: “In both countries we see a better management concerning the execution of the budget. However, several risks remain present, especially with regard to the governmental companies and social funds.”
Despite the significant challenges Curaçao had with the AOV, the tax income and the government companies, it closed the year 2014 with a surplus. This surplus was used to compensate the deficits realized during the period of 2010-2012. During the years 2013 and 2014 Curaçao has managed to almost completely compensate the incurred deficits. Now there is space to settle the reserves in the social funds and to build up a resistance capital.
“Sint Maarten still has difficulties letting the tax income keep up with the economic growth. The initiatives to let the government companies give a contribution to the state budget also face start up difficulties. The expectation is that 2014 will be closed off with a deficit of almost ANG 8 million. The incurred deficits since 2010 will have to be compensated, which represents a heavy load for the budget,” the CFT writes.
Both countries are said to have caught up substantially with respect to producing and controlling the annual reports, but there is still a backlog in the evaluation and adoption of the annual reports by Parliament.